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Ad Age: Why So Many Media Companies Stumble GloballyThe few news brands that have succeeded, to greater or lesser degrees, arguably include CNN, Bloomberg, People, Thomson Reuters, The Wall Street Journal, The New York Times, The Financial Times and The Economist. Other contenders are the Associated Press, the BBC, ABC, NBC, maybe CBS, National Public Radio, News Corp. and the top U.K. dailies, said Ken Doctor, the newspaper veteran who's now an analyst at Outsell. "If a news-media organization sees itself as covering the wider world, sees it as its foundation, that in and of itself differentiates it from all the local media -- newspapers, TV, radio -- out there," he said. "If, in addition, it has substantial reporting and editing resources, then it can play. The tough part is the part we're in: Who wins the race to ubiquity and can make it pay off?"

NYT: If The Globe Were Sold, What Price? “The best guesstimate of the real price: a buck. The best of an announced price: between $50 and $100 million,” he wrote in an e-mail message. The devil will be in the details of the obligations that a buyer would assume, he said, adding that “a buck essentially represents a gentleman’s agreement: I take a liability, headache and a distraction off your hands.”
He said that the Times Company could hang on to some pension liabilities or other obligations in exchange for a higher purchase price, a number that would give the appearance that it was getting something for the more than $1 billion it paid 16 years ago. He added that no bank would be interested in financing a deal given how other deals have blown up, so “the owner’s own money is immediately at risk.”

BizTimes.com: Journal Sentinel faces daunting choices“There’s no strategy – this is panic. What we’re likely to see this year (around the country) and what we’ll see in Milwaukee too is (publishers asking) how much they need to cut back and how much they can do to still hold their place in the market. For publishers, it’s about ‘How do we stay alive and stay profitable until we can get to some sort of breathing period?’ (Economic) recovery will not bring back their old business, but it will give them some breathing room.”

AP: Threat to shut Boston Globe shows no paper is safThe threat to close the paper "sends a very clear message to all employees and unions of surviving newspapers — that this is not business as usual. This is uncharted territory....Newspapers all "have a sword over their heads," said Doctor. If the industry wants to survive, he said, "everyone has to give some blood."

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Posts from August 2009

August 19, 2009

Late midsummer brings hugely cautious optimism, and lots of identity guessing games -- who has Journalism Online signed?; what's Rupert really up to? -- worthy of William Shakespeare. Here's nine questions for the time:

1) Who are the 330 non-dailies in the Journalism Online semi-announcement? That's a big part of the guessing game, as reporters find
out that McClatchy, Dow Jones and Tribune are all saying they're not
participating. Speculation focuses on Gannett with its 850 non-daily
(weekly, niche+) publications in the US and its increasing online niche orientation,
using its Ripple6 engine. Or on Gatehouse, with its several hundred weeklies. Even MediaNews counts about a hundred weeklies. Or maybe the only announced partner
-- marketing-oriented Itz Publishing of Portland -- is bringing some
companies into the action. Far easier to get to "330" through a couple of
bigger companies than by one-offs.

Of course, the JO release was more of a tease
than an announcement. The numbers seem to be based on non-binding
letters of intent, which is kind of like asking publishers in a paid
content town hall discussion to raise their hands if they'd like new
reader revenue. Attributor, another player in this summer's intense
round of "paid" talks, also moved forward with many media companies, but did it without contracts or
even loi's. (Content Bridges: "Attributor "Fair Share Consortium"
Completes Newspaper Trifecta"). It
has obtained feeds from "50% of the top 25 U.S. papers" to test its
ad-monetization-of-piracy initiative. The key word here, for both: test.

If
it fact, the ability to charge -- and get paid
-- is based on having a good degree of proprietary content, then maybe
it is the weeklies who have a better chance of bundling print and
online than city dailies. Those that have websites or e-editions have
seen them mainly as print retention tools, or bonuses for snowbird
customers, Brian Steffens, exec director of the National Newspaper Association (2300
largely weekly members), tells me. He says that the about 42% of his
members' papers are paid, 6% free and and the rest some combo of the
two. I wonder if these paid papers -- which take in $20-50 in annual subs --
could tack on an online fee of 20% or so, and have it stick far better
than their daily counterparts.

2) Sure, Everyblock's code is still open-source (courtesy of the Knight Foundation), but doesn't its new owner MSNBC.com remind us it's still about location, location, location? The blinding simplificity of the Everyblock idea -- local city data routinized and made easy to use -- should have been one grabbed by newspaper companies. Local, local, local, right? While some operations, like the Sacramento Bee's Investigations Center and Mike Orren's Dallas start-up PegasusNews.com have gotten -- and acted on -- the value of local data, most newspaper companies still haven't. Yes, they can still use the open-source code, but with Everyblock innovator Adrian Holovaty working with MSNBC.com, does that give a non-newspaper company two legs up? At the same time, kudos to MSNBC's Charlie Tillinghast and Cory Bergman (himself a local online pioneer through Seattle's Next Door Media and more) for winning the prize. Now, let's see what they do with it.

3) Will GM's deal with car buyers mean that even more traditional
market dollars -- including newspaper print -- go away, as buyers and
sellers blissfully meet on eBay, cutting out a lot of middlemen? What kind of dent would that make in newspaper auto sector recovery expectations?

4) Hasn't Madeleine Brand, guest summer host for NPR's All Things Considered, been a breath of Left Coast (non-humid) air? Robert Siegel, Melissa Block and Michelle Norris are stalwarts, but it's been refreshing to have the easy-peezy feel she brings (for instance, "America: Prepare To Be Mightily Booshed,") even if her inclusion has been day-to-day.

5) Is "Do-Over" the coming strategy for newspaper companies? For the half-dozen US newspaper companies in bankruptcy, it's an official, court-approved do-over they are looking for, witness Brian Tierney's effort to shed some $300 million in debt in Philly as the papers seek to emerge from court supervision. He can make the case for a fresh start, building on the pride of downsizing: "Our performance has been incredible. We have
carved $95 million out of the cost structure of the paper in the past
three years." Meanwhile the Star-Tribune is about to jettison some $400 million of its half-billion-dollar debt as it emerges from bankruptcy. The bet in Minneapolis and Philly: recovering revenues may be sufficient to pay operating expenses, greatly reduced debt service and a bit of profit. It's a strategy that that McClatchy, MediaNews and the New York Times would love to follow as well, but they've all stayed out of the courts. The strategy, though, may be parallel: find some way -- property sales, long-term debt restructuring, new capital -- to segregate the large debt service that the business no longer will support.

6). Hasn't the Daily Mirror beaten Rupert to a punch? Murdoch's won great attention with his intention, his nod to a paid content future, and apparently is readying a new Sunday Times paid online product for November. In the meantime, Trinity Mirror, the third-largest newspaper group in the UK, has debuted Mirror Football. Take a look: it seems like the kind of full-featured (video, columns, blogs, visuals, data, and great use of archives) product that consumers might just pay a bit extra for, a newspaper version of a MLB or ESPN-like product. Says Sly Bailey, Trinity Mirror CEO: "The important thing for us is to develop the brand with the right
content that engages a passionate audience, and therefore to have a
diversified model that isn’t just about advertising. We think that is
the next stage, and whether over time that gives you the opportunity to
think about whether there are areas you can charge for, that's an open discussion -- but you have to create that content overall in order to have that option.” Exactly. Value first, then charge.

7). How many business news sites does the Wall Street Journal need? We got word Friday that the "The WSJ has placed at least three different ads seeking executive-level editors for a new business Web site." My guess is that Dow Jones, with the Journal, Barron's and Marketwatch, has sufficient brands deployed in the marketplace; in fact, I'd expected they would have niched and nested them better by now, almost two years into News Corp ownership. So my guess: new talent may be hired for niche sites, branded under some existing label, not a new one. WSJ's Alan Murray has already hinted at energy and CFO niches, no-brainers for a parent company skilled (through Factiva+) at B2B niching. The next logical move: greater regional business coverage in big business markets like Detroit, the Bay Area and Philly, which have all seen their own dailies cut back on business coverage.

8) How long will Legal Ads stay legal? The
news reader in me wants them to keep being published, and the taxpayer
in me cries foul. The Mercury News ran two pages of Legal ads in
microscopic text last week, btw too small for aging baby boomers to
read. Reading them is besides the point, though, anyway, right? It was
probably old English law that required a public display of legal
announcements, and that's carried over as a nice, little subsidy for
newspapering. How long will it be though until law catches up with
reality; instead of must-publish, must-Tweet?

9) Been down so long, looks like up to me? With apologies to Richard Farina, that's how I read Randy Dotinga's good report on new owner Platinum Equity's meeting with the staff. Revenues down more than 50% in three years. Coming: shorter stories and a move beyond Stone Age page assembly! One staffer's comment reminds me of staffers' optimism as Zell replaced Old Tribune and Tierney replaced Knight Ridder: [The new bosses seem decisive seem] "determined to not
sit around a table and wring their hands and debate endlessly whether
to proceed with one initiative or another." Alas, be careful what you wish for.

August 16, 2009

Update: MSNBC.com just paid several million to buy Everyblock, the much-watched Adrian Holovaty start-up, around local city data. Smart local interactive data should be a strong core of every local news(paper) site; it drives traffic and screams utility. The fact that MSNBC.com -- co-owned by Microsoft and NBC -- understands that opportunity better than newspaper companies speaks volumes. The deal also reinforces the notion, noted in the post below, that Microsoft will once again become a more dominant local, news-oriented player in the years ahead.

On Monday, Advance Internet is announcing its new partnership with Microsoft, an agreement that tells us a few things about the emerging, post-recession marketplace.

Advance Publications, Inc., isn't a well-known name outside the industry. Yet, it's one of the major media companies in the country, encompassing through Conde Nast more than 20 top-drawer magazines (The New Yorker, Wired, Vanity Fair, Gourmet+), the apparently immortal Sunday Parade, the 42-city strong American City Business Journals group and cable interests, in addition to its 30 newspapers. A very private company, Advanced is ranked 41st, by Forbes, among private companies in the country, taking in more than $7.5 billion.

So when Advance partners its online newspaper ad business with Microsoft -- when it zags when many of its peers are zigging -- it's worth taking note. The new partnership covers all the Advance newspaper properties, from Newark and Jersey City to Cleveland to Michigan to Portland, Oregon, with many in between. Advance Internet operates as a division, separate from the company's newspapers, but is set up to leverage all those papers' content and sales forces.

The new partnership -- already launched in part -- parallels the Yahoo Newspaper Consortium, but differs from it in one important respect.

What's the same:

Advance Internet's own salespeople, and then the vanguard of its
newspaper sales reps, will sell into the Microsoft Media Network,
encompassing all the Microsoft sites. So, in essence, Advance will
greatly expand what its sales teams can offer local advertisers. The idea and the centerpiece of the deal for Advance: the ability to offer local businesses additional marketing solutions, multiplying Advance's sales.

Advance Internet will use the capabilities of the Microsoft ad
technologies -- among them behavioral targeting (BT) and re-messaging
(following would-be customers as they move about the web)

The main difference: Advance Internet is maintaining its own ad platform, currently powered by 24/7 RealMedia, and integrating with Microsoft. Yahoo Newspaper Consortium members have fully adopted the Yahoo APT platform for their ad serving businesses, creating a closer, more exclusive relationship. "We wanted flexibility," Peter Weinberger, president of Advance Internet, tells me. Weinberger won't specify what parts of the deal involve exclusivity or the duration of the contract.

So, we can read the move in several ways:

First, Microsoft is really coming back -- to the newspaper world. After Sidewalk, after all kinds of attempted relationships, Microsoft -- soon to be half of the Google/Microsoft search duopoly -- is once again seeing the benefits of the newspaper company local connection. Advance Internet is
the first major local news company reselling display ads into the Microsoft
Media Network, Peter MacDonald, who is Microsoft's PubCenter Director of Business Development, Advertiser and Publisher solutions, told me. Haven't heard of the Microsoft Media Network? It was formed in February, rolled up from various Microsoft businesses, well-described here by ClickZ. Among the other big media companies named as collaborating on the new underlying PubCenter platform are IAC, Dow Jones Online, The New York Times Co., Time Inc., and Viacom.

With
the Advance deal, it gets good local sales potential -- those
feet-on-the-street that are the envy of companies that are
cubicle-bound and technology-centered. Recall that in the
Microsoft/Yahoo deal, Microsoft's Bing and paid search businesses will
power not only Yahoo, but apparently all the newspapers sites in the consortium.
That will mean that the majority of newspaper sites (with the big
exceptions of Gannett, Tribune, the New York Times and the Washington
Post, among others) will see critical parts of their business powered by
Microsoft. (Peter Krasilovsky notes that this deal, in the works before the MSFT/YHOO deal was done, may raise some political issues between the would-be partners.)

We all see the shape of the new battle for local ad dollars. Face
it, online newspaper growth has slowed dramatically. We're seeing
reading patterns harden in the marketplace, and it's leaving newspaper sites underwhelmed. Yes, they can claim as Advance does -- "according to Media Audit,
five of our sites rank in the top 10 of newspaper affiliated sites based
on local penetration of adults 18+" -- to be strong locally. But time on site across the news industry is paltry, less than 12 minutes a month in most cities, according to Nielsen data.
That means they must sell much more than tired old banners on their own
sites. The solutions, here and in the Yahoo consortium: 1) sell more
products, in addition to display; and 2) sell Other People's Inventory
and networks; in Advance's case, Microsoft's.

As I've noted, this new math is compelling -- many smaller advertisers never could afford print. They can afford online, and that means the potential of hundreds and thousands of new customers in every metro marketplace.

Further, this is a market newspaper companies must win if they have any hope of maintaining their already-downsized newsrooms. They're not winning it now. According to Borrell Associates, roughly half of the $14 billion local online ad market is going to the pure plays -- Google, Yahoo, Microsoft, AOL and smaller sites without legacy media businesses. Only a quarter of it is going to newspaper companies. Newspapers' strength is in non-targeted display advertising; they're minor players in the fastest-growing online ad segments of paid search and direct marketing.

If Advance and other newspaper chains see the local opportunity, they aren't alone. Yellow Pages
companies, with their own veteran feet, see it, as witnessed by the
recent ATT/Yahoo tie-up. (Content Bridges" "5000 New Competitors Just Landed in News Markets."
Broadcasters see the new markets opening as well -- all those small businesses
that used to be "too small to sell", businesses that have gotten a
taste of self-service keyword advertising, but would like some help in
putting together better, smarter campaigns. Both YP and broadcast
companies are part of the Microsoft reseller program that Advance just
joined, in fact. Conversely, Weinberger notes that with the new
programs "we can go after broadcast dollars."

August 06, 2009

Face it. We're in a time that seriously lacks oracles. So, apparently, Rupert Murdoch passes for one, given his well-chiseled mien and occasional wont to make pronouncements.

Now he's making a bit of midsummer news, with still another comment on charging for news:

"Quality journalism is not cheap. The digital
revolution has opened many new and inexpensive distribution channels,
but it has not made content free. We intend to charge for all our news
websites....We're hopeful we can build significant revenues from the sale of digital delivery of newspapers, news content".

It recalls one of Rupe's early pronouncements, declarations often requiring translation, as he pursued the Wall Street Journal: "The value of financial journalism, high-quality financial journalism, is you can charge for it."

Yes, you can. Rupe didn't prove that. The crews at the Journal and Dow Jones, and at the Financial Times, did. As Staci Kramer has pointed out,
WSJ indeed charges for it, and well, and well, confusedly, employing
the many sleight-of-hand circulation marketing tricks long employed in
the industry. Indeed, business and finance journalism can be charged
for; that's not news.

It's been a simple truism: where money changes hands -- investing, buying, selling -- people are more willing to pay for related news and information. Business and finance are the easiest to see, as is Consumer Reports' successful model. We should be seeing similar success in world-beating travel and health sites -- lots of money in both -- but we haven't seen products that will get many of us to yet open our wallets.

But, news, good old "general" news or the "scoop journalism" that Murdoch has long extolled? There's little evidence that people will pay for news in a burgeoning news environment, where the amount of "good-enough" news grows daily. Think start-up sites from the Politicos to the Voices of San Diego, public radio (newly ascendant nationally and increasingly locally), commercial broadcasters finally getting the value of online "text".

Murdoch started his comments yesterday with the notion that classifieds will never come back to their previous levels. You can draw the line between that comment and his -- and his industry's -- wish to charge for content. The problem: just because one huge revenue source is finally acknowledged to be beyond repair, that doesn't mean the marketplace will let you open a new cash spigot. The marketplace, in fact, shows little sign of supporting "paid content."

Will NewsCorp put up a pay wall stretching from the Manhattan's New York Post to London's Times to Sydney's Australian to Suva's Fiji Times and back to Bill O'Reilly Central? I doubt it.

If there's a better realpolitiks player in the news industry than Murdoch, please stand up. If not, Murdoch knows that News Corp putting up a pay wall would be akin to unilateral disarmament -- and that's something only pinkos do. Put up a pay wall when many others (including Reuters, as Chris Ahearn explains in a to-the-point post) improve their superhighways, better to take advantage of the link economy, and you'll find yourself with a lonely citadel, a citadel no longer a crossroads in the biggest emerging marketplace of the day, online advertising.

That's not to say News Corp -- and others -- won't charge.

Steve Brill is offering 16 ways to charge, through Journalism Online, the would-be Paypal for news. Some of the 16 will work, though how much new revenue they will generate is the big question, as some publishers sign on.

One approach I find likely for News Corp, for the New York Times and other national brands on this side of the Atlantic and the other, is the All-Access Pass. When you hear Murdoch and other publishers justifiably scream about Jeff Bezos' hard bargain -- he keeps customer relationships and 70% of the revenue -- you understand that they see the multi-platform future becoming real and want to be in the center of it.

We know that most readers expect news and information to be free. That's annoying, but apparently the case. We also know that most of us are quite willing to pay out hundreds of dollars a month in "access" charges, for broadband Internet access, for "data plan" on our smart-as-heck phones, for cable TV.

So expect a few companies to go all-access. As in, you can get all the Dow Jones content -- WSJ, Marketwatch, Barrons+ -- on any platform anytime, formatted for you, with all your preferences remembered, your stories saved, your shared e-mail lists available seamlessly. For a charge of maybe $5.99 to $9.99 a month. It's not a charge for content. It's a charge for convenience, for access. Sure, sign me up.

My sense is that such an approach will find appeal among 5-15% of readers, as we rely increasingly on smartphones and play with the new e-readers over the next couple of years.

Such an approach wouldn't put up a pay wall -- foreclosing web growth -- but could supply a new revenue stream that's badly needed.

August 05, 2009

Midsummer brings us a surprising amount of news and innovation. Isn't anyone on vacation? Here's Nine Questions on what I'm seeing and hearing:

How desperate is a paper in bankruptcy? Longtime Philadelphia Inquirer crime reporter George Anastasia does great short videos on the site, called "Mob Scene". Current advertiser: "Club Risque," whose cuties pitch the upscale gentlemen's club briskly in 15 seconds. "Text us at Risque to stay updated on special promotions. Come down here and meet us. It's a real mob scene." Now that's product placement that seems to cross several lines. The advertiser that rotates with Club Risque: Applebee's.

Is MissionLocal a model of the future? Supported by the Ford Foundation, among others, and staffed in part by the UC Berkeley Journalism School, it's a vibrant, bilingual, multimedia site, focusing on a diverse and energetic San Francisco neighborhood. Good piece about it on KQED's California Report.

Can you get me the Greatest Generation niche? Check out the Mercury News' new Sunday Extra print section. The idea: there's an (old) niche that still likes the Sunday TV book, but it's way too expensive to print for everyone. So the Merc is packaging TV Week with a six-page wraparound Sunday Extra (Steve Yelvington has made the good point that any newspaper naming a section "Extra" should think again) -- and then charging subscribers an extra 50 cents a week for it. Or as it says, "a fraction of the cost of a magazine." Sunday Extra's article tell us the target demographic, with pieces on a 72-year-old "yoga pioneer", a "Seniors" column, "Wanda Jackson still rocking at 71," and a feature on the 72-old prince of sibling revelry, Tommy Smothers. Journalism Online has talked about lots of niching, but I don't know they've come up with this one.

Is the newspaper industry serious about a craigslist killer? No, not the Philip Markoff case, the alleged serious killer now indicted in Boston, after a craigslist-assisted meet-up apparent gone deadly. The NAA, in its renewed vigor to find new solutions to the industry's revenue woes, has been strategizing a "craigslist killer". That's right, a new industry-wide solution to beat back Craig Newmark's homegrown largely free classified product that has made much of a multi-billion dollar classified business obsolescent. Of the initiatives NAA is comparing -- among them CircLabs, Journalism Online, Attributor, ViewPass -- this could be the best one of them .... if it were 1999 instead of 2009. Classifieds are so last century.

Will the run-up in newspaper share prices grease the skids for property sales? Wall Street had decided newspapers have a future, as downsized, increasingly cost-effective, hybrid news companies. Share prices have doubled and tripled in some cases. So we can almost hear the pitches would-be buyers (the Pagliuca/Connors group in Boston, Meisrow Financial in Chicago) must be getting. "You're buying at the bottom. The worse is behind us." So are the Globe and the Sun-Times, among others, good deals? Is this a real bottom of newspaper revenue? Remember, Sam Zell, Brian Tierney and Chris Harte all thought they were buying at a bottom, too.

Will the Globe follow the Portland newspaper model? The Portland (Maine) Guild showed great stamina and flexibility in partnering with new private equity owners, qualities that the Boston Guild hasn't shared. Yet, an emerging model of private or angel investors, foundation support and labor participation in ownership may prevail. It's a shaky assemblage that may play to the uncertainty of the times. Can newspapers really sustain robust newsrooms and traditional for-profit business models or are hybrid models a better hedge against the unknowns?

What is Christine Varney taking from her newspaper industry talks? Obama's new anti-trust chief has drawn a lot of attention for her interest in Google's books deal, and beyond that, to Google's great search dominance. Varney has also been meeting with news industry people, management and labor, getting a sense of what's wrong in the news business. Publishers, of course, would love clarity about how much they can work together -- on paid models, on negotiations with Google+ -- without incurring anti-trust wrath. Unsurprisingly, Varney and her people haven't given them the bright line they'd like. Will Varney allow newspapers to get together, cartel-like? Will Google's dominance in search, and leading role in news search (providing 25%+ of news site traffic), become part of reinvigorated anti-trust enforcement?

Aren't newspapers missing the importance of the new content factories? TechCrunch brought attention to AOL's big content push -- 500 full-time writers and editors, plus another 1,500 freelancers. Consider also that Demand Media is producing 3000 stories a day and has built an archive of 650,000 stories and 150,000 videos. Yes, they are more feature-like than news, but then again, that's where much of the ad interest is in journalism. The Demands and AOLs are applying a bit of science, a bit of algorithm, to content production, and publishers ignore this approach at their further peril.

Is GrowthSpur the right local tonic? Mark Potts' new tools-and-networking company aimed at aiding local media start-ups may find fertile ground. We see lots of start-ups -- the Pocantico group and far beyond. At the same time, local is getting so much more competitive. Take my former journalistic stomping grounds of the Twin Cities. MPRNews now looks like a direct competitor to the StarTribune and Pioneer Press sites, and then there's burgeoning MinnPost, and early web pioneer WCCO, among numerous others. So GrowthSpur is on to something, aiming to bring order, sense and scale to local markets. We'll have to see how wide it is aiming, and who else will soon be entering local markets, seeing fresh business opportunity in growing chaos.